Governor Newsom Signs SB 648: Stronger Protections Against Tip Theft in California
On July 16, 2025, Governor Gavin Newsom signed Senate Bill 648 (SB 648) into law, marking a significant step forward in California’s ongoing efforts to combat wage theft and the improper handling of tips. This new legislation adds civil penalties and private enforcement rights to California’s existing labor protections concerning tips (gratuities), ensuring workers in the hospitality and service industries are better protected from tip theft.
What Does SB 648 Do?
SB 648 enhances California’s protections around tips (gratuities) by:
- Adding a private right of action: Employees can now sue directly for violations of California’s gratuity laws under Labor Code § 351.
- Allowing recovery of penalties: The new law authorizes civil penalties of $250 per violation and $1,000 for willful violations.
- Clarifying tip ownership: It reaffirms that tips are the sole property of the employee(s) for whom they are left.
- Expanding enforcement: Employees can bring claims individually or on behalf of others, similar to a representative action.
What the Law Already Says About Tips
Under existing law (Labor Code §§ 351–356), employers in California are strictly prohibited from:
- Taking any part of a tip left for an employee,
- Making deductions from tips,
- Redistributing tips in a way that violates the law.
However, prior to SB 648, there was no private right of action to enforce section 351. To pursue a section 351 claim, employees had to either file a claim with the Labor Commissioner’s office or file a Private Attorney General Act (PAGA) representative action.
Why SB 648 Matters
SB 648 gives workers the tools to directly enforce their rights under section 351, even if the Labor Commissioner chooses not to pursue a case or a PAGA claims is not appropriate. It closes a long-standing enforcement gap and increases the pressure on employers to ensure lawful tip practices.
This is particularly relevant in industries like:
- Restaurants and cafés
- Hotels and spas
- Rideshare and delivery services
- Hair and nail salons
- Casinos and entertainment venues
What Are the Penalties?
SB 648 amends Labor Code § 351 to authorize civil penalties for tip theft:
- $250 per violation
- $1,000 for each willful violation
These penalties are in addition to any wages, tips, or interest the employee is owed. The law also allows the court to award attorneys’ fees and costs to a prevailing employee.
When Does SB 648 Take Effect?
SB 648 goes into effect on January 1, 2026.
Conclusion
SB 648 reinforces California’s long-standing stance: tips belong to workers—not employers, not managers, and not the house. With this new law, employees now have a stronger enforcement mechanism and financial remedies available directly in court. Tip theft is now not only a violation of the Labor Code—it’s now grounds for a private section 351 lawsuit.
Hi, so I work at a restaurant and for the longest time as a server my hourly pay is being deducted based on the amount of tips I make. Therefore I worked about 40 hours for the past paycheck and I should’ve earned $700 but I only earned $60 and they claim it’s because we made more money in tips however we don’t report how much cash tips we make so sometimes I think they just make up the number of tips. I was wondering, is this legal or what can I do about it to make sure I’m earning my hourly pay.